Identity theft on the rise

One of the fastest growing crimes in this country involves stealing people's social security numbers to file fake tax returns. NBC's Kate Snow reports.

Crime and courts

This content comes from Closed Captioning that was broadcast along with this program.

>>>with this year's tax deadline two weeks away, we are back with an alarming new trend. one of the fastest growing crimes in this country involves stealing people's identities, their
social security numbers
to file fake
tax returns
with the
irs
. it's happened almost a million times in the last year alone. here's nbc's
kate snow
with more tonight.

>> reporter: sheila had no idea someone had stolen her identity until her accountant tried to file her
2009tax return
online.

>>he calls and said there's a problem. it got kicked out.

>> reporter: what do you mean it got kicked out?

>>well, something came up on the screen that said we'd already filed.

>>you had filed?

>>no, we had not. i said you need to contact
irs
right away.

>> reporter: that's when she says her nightmare began.

>>frustrating, scary. aggravating and time consuming. lot of calls, lot of letters, lot of forms.

>> reporter: a thief stole her name, date of birth and
social security number
, then electronically filed a fake return with the
irs
and received a refund. meantime, she had to fight for months to prove she was the real taxpayer and deserved her own very real $5,700 refund.

>>east tell pa here is a hire
crime rate
, lot of drugs, lot of guns.

>> reporter: this detective says the crime is so easy and so lucrative, criminals in tampa are doing it instead of selling drugs.

>>i had a
drug trafficking
tell me i can go out there and sell a kilo or two of cocaine, hopefully make $5,000, $10,000. i can submit ten
tax returns
a day. i've made myself $40,000, $50,000. he goes and i can watch cartoons while i'm doing it. no suppress.

>> reporter: until recently, arrests and prosecutions were rare but the
irs
says that's changing.

>>we stopped $20 billion from going out the door last filing season and we're constantly balancing how do we make sure we get the legitimate taxpayer their refund as quickly as possible without causing them undue burden, but at the same time stopping the bad returns.

>> reporter: but sheila is not impressed. a crook filed as her not once, but twice.

>>it is a life changing experience. that's the only reason i'm doing this interview, is because it is a horrible crime and it's not being handled well.

>> reporter: this year she got her refund, but every year she worries she might be hit again.
kate snow
, nbc news, ft. lauderdale.